exhibit1034_warrant.htm


    Exhibit
10.34

    
 

    
      NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (B) AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALES OF THESE SECURITIES.

       

      CYTORI
THERAPEUTICS, INC.

       

      WARRANT
TO PURCHASE COMMON STOCK

       

      
        	 
      	 
      	 
      
	
                Warrant
      No. ___

              	
                  

              	
                Original
      Issue Date: _________, 2008

              


      

       

      Cytori
Therapeutics, Inc., a Delaware corporation (the “Company”), hereby certifies
that, for value received, [_______________] or its permitted registered assigns
(the “Holder”), is
entitled to purchase from the Company up to a total of [_____________
(__________)] shares of common stock, $0.001 par value per share (the “Common Stock”), of the
Company (each such share, a “Warrant Share” and all such
shares, the “Warrant
Shares”) at an exercise price per share equal to $8.50 per share (as
adjusted from time to time as provided in Section 9 herein, the “Exercise Price”), at any time
and from time to time after the date that is six months from the date hereof
(the “Trigger Date”)
and through and including 5:30 P.M., New York City time, on ____________, 2013
(the “Expiration
Date”), and subject to the following terms and conditions:

      


      This
Warrant (this “Warrant”) is one of a series
of similar warrants issued pursuant to that certain Securities Purchase
Agreement, dated August 7, 2008, by and among the Company and the Purchasers
identified therein (the “Purchase
Agreement”).  All such warrants are referred to herein,
collectively, as the “Warrants.”

       

      1.           Definitions. In
addition to the terms defined elsewhere in this Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
Purchase Agreement.

        

      2.           
Registration of
Warrants.  The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder (which shall include the initial Holder or, as the
case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder) from time to time.  The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      3.           Registration of
Transfers. Subject to the restrictions on transfer set forth in Section
4.1 of the Purchase Agreement and compliance with all applicable securities
laws, the Company shall register the transfer of all or any portion of this
Warrant in the Warrant Register, upon surrender of this Warrant, with the Form
of Assignment attached as Schedule 2 hereto
duly completed and signed, to the Company’s transfer agent or to the Company at
its address specified in the Purchase Agreement and (x) delivery, at the request
of the Company, of an opinion of counsel reasonably satisfactory to the Company
to the effect that the transfer of such portion of this Warrant may be made
pursuant to an available exemption from the registration requirements of the
Securities Act and all applicable state securities or blue sky laws and (y)
delivery by the transferee of a written statement to the Company certifying that
the transferee is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and making the representations and certifications set forth in
Section 3.2(b), (c), (d) and (f) of the Purchase Agreement, to the Company at
its address specified in the Purchase Agreement. Upon any such registration or
transfer, a new warrant to purchase Common Stock in substantially the form of
this Warrant (any such new warrant, a “New Warrant”) evidencing the
portion of this Warrant so transferred shall be issued to the transferee, and a
New Warrant evidencing the remaining portion of this Warrant not so transferred,
if any, shall be issued to the transferring Holder. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations in respect of the New Warrant
that the Holder has in respect of this Warrant. The Company shall prepare, issue
and deliver at its own expense any New Warrant under this Section
3.

       

      4.           Exercise and Duration of
Warrant.

       

      (a)           All
or any part of this Warrant shall be exercisable by the registered Holder in any
manner permitted by Section 10 of this Warrant at any time and from time to time
on or after the Trigger Date and through and including 5:30 P.M. New York City
time, on the Expiration Date. At 5:30 P.M., New York City time, on the
Expiration Date, the portion of this Warrant not exercised prior thereto shall
be and become void and of no value and this Warrant shall be terminated and no
longer outstanding.

      


      (b)           The
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached as Schedule 1 hereto
(the “Exercise
Notice”), completed and duly signed,  and (ii) payment of the
Exercise Price for the number of Warrant Shares as to which this Warrant is
being exercised (which may take the form of a “cashless exercise” if so
indicated in the Exercise Notice and if a “cashless exercise” may occur at such
time pursuant to Section 10 below), and the date such items are delivered to the
Company (as determined in accordance with the notice provisions hereof) is an
“Exercise Date.” The
delivery by (or on behalf of) the Holder of the Exercise Notice and the
applicable Exercise Price as provided above shall constitute the Holder’s
certification to the Company that its representations contained in Section
3.2(b), (c), (d) and (f) of the Purchase Agreement are true and correct as of
the Exercise Date as if remade in their entirety (or, in the case of any
transferee Holder that is not a party to the Purchase Agreement, such transferee
Holder’s certification to the Company that such representations are true and
correct as to such assignee Holder as of the Exercise Date).  The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder, but if it is not so delivered then such exercise shall
constitute an agreement by the Holder to deliver the original Warrant to the
Company as soon as practicable thereafter.  Execution and delivery of
the Exercise Notice shall have the same effect as cancellation of the original
Warrant and issuance of a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

       5.           Delivery of Warrant
Shares.

       

      (a)           Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
three Trading Days after the Exercise Date) issue or cause to be issued and
cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate (provided that, if the Registration
Statement is not effective and the Holder directs the Company to deliver a
certificate for the Warrant Shares in a name other than that of the Holder or an
Affiliate of the Holder, it shall deliver to the Company on the Exercise Date an
opinion of counsel reasonably satisfactory to the Company to the effect that the
issuance of such Warrant Shares in such other name may be made pursuant to an
available exemption from the registration requirements of the Securities Act and
all applicable state securities or blue sky laws), (i) a certificate for the
Warrant Shares issuable upon such exercise, free of restrictive legends, or (ii)
an electronic delivery of the Warrant Shares to the Holder’s account at the
Depository Trust Company (“DTC”) or a similar
organization, unless in the case of clause (i) and (ii) a registration statement
covering the resale of the Warrant Shares and naming the Holder as a selling
stockholder thereunder is not then effective or the Warrant Shares are not
freely transferable without restriction under Rule 144 by Holders who are not
affiliates of the Company, in which case such Holder shall receive a certificate
for the Warrant Shares issuable upon such exercise with appropriate restrictive
legends.  The Holder, or any Person permissibly so designated by the
Holder to receive Warrant Shares, shall be deemed to have become the holder of
record of such Warrant Shares as of the Exercise Date.  If the Warrant
Shares are to be issued free of all restrictive legends, the Company shall, upon
the written request of the Holder, use its reasonable best efforts to deliver,
or cause to be delivered, Warrant Shares hereunder electronically through The
Depository Trust Company or another established clearing corporation performing
similar functions, if available; provided, that, the Company may, but will not
be required to, change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through such a clearing
corporation.

       

      (b)           
If by the close of the third Trading Day after delivery of an Exercise Notice
and the payment of the aggregate exercise price in any manner permitted by
Section 10 of this Warrant, the Company fails to deliver to the Holder a
certificate representing the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third Trading Day and prior
to the receipt of such Warrant Shares, the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company
shall, within three (3) Trading Days after the Holder’s request and in the
Holder’s sole discretion, either (1) pay in cash to the Holder an amount equal
to the Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased (the “Buy-In Price”), at which
point the Company’s obligation to deliver such certificate (and to issue such
Warrant Shares) shall terminate or (2) promptly honor its obligation to deliver
to the Holder a certificate or certificates representing such Warrant Shares and
pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of Warrant Shares, times (B) the
closing bid price of a share of Common Stock on the Exercise Date.

       

      (c)           To
the extent permitted by law, the Company’s obligations to issue and deliver
Warrant Shares in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      violation
or alleged violation of law by the Holder or any other Person, and irrespective
of any other circumstance that might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit the Holder’s right to pursue any other remedies available to
it hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

       

      6.           Charges, Taxes and
Expenses. Issuance and delivery of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes and
expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or the Warrants in a name other than that of the Holder or an Affiliate thereof.
The Holder shall be responsible for all other tax liability that may arise as a
result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.

       

      7.           Replacement of
Warrant.  If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction (in such case)
and, in each case, a customary and reasonable indemnity and surety bond, if
requested by the Company. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay
such other reasonable third-party costs as the Company may prescribe. If a New
Warrant is requested as a result of a mutilation of this Warrant, then the
Holder shall deliver such mutilated Warrant to the Company as a condition
precedent to the Company’s obligation to issue the New Warrant.

       

      8.           Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares that are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons other than the Holder (taking into account the adjustments and
restrictions of Section 9). The Company covenants that all Warrant Shares so
issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable. The Company will take all
such action as may be reasonably necessary to assure that such shares of Common
Stock may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of any securities exchange or automated
quotation system upon which the Common Stock may be listed.

       

      9.           Certain Adjustments.
The Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section
9.

       

      (a)           
Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides its outstanding shares of Common Stock into a larger number of
shares, or (iii) combines its outstanding shares of Common Stock into a smaller
number of shares, then in each such case the 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Exercise
Price shall be multiplied by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately before such event and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to clause
(i) of this paragraph shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii) of this
paragraph shall become effective immediately after the effective date of such
subdivision or combination.

       

      (b)           Pro Rata
Distributions.  If the Company, at any time while this Warrant
is outstanding, distributes to all holders of Common Stock for no consideration
(i) evidences of its indebtedness, (ii) any security (other than a distribution
of Common Stock covered by the preceding paragraph) or (iii) rights or warrants
to subscribe for or purchase any security, or (iv) any other asset (in each
case, “Distributed
Property”), then, upon any exercise of this Warrant that occurs after the
record date fixed for determination of stockholders entitled to receive such
distribution, the Holder shall be entitled to receive, in addition to the
Warrant Shares otherwise issuable upon such exercise (if applicable), the
Distributed Property that such Holder would have been entitled to receive in
respect of such number of Warrant Shares had the Holder been the record holder
of such Warrant Shares immediately prior to such record date without regard to
any limitation on exercise contained therein.

      


      (c)           Fundamental
Transactions. If, at any time while this Warrant is outstanding
(i) the Company effects (A) any merger of the Company with (but not into)
another Person, in which stockholders of the Company immediately prior to such
transaction own less than a majority of the outstanding stock of the surviving
entity, or (B) any merger or consolidation of the Company into another Person,
(ii) the Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (iii) any tender offer or exchange
offer approved or authorized by the Company’s Board of Directors is completed
pursuant to which holders of at least a majority of the outstanding Common Stock
tender or exchange their shares for other securities, cash or property, or (iv)
the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (other than as a result of a
subdivision or combination of shares of Common Stock covered by Section 9(a)
above) (in any such case, a “Fundamental Transaction”),
then the Holder shall have the right thereafter to receive, upon exercise of
this Warrant, the same amount and kind of securities, cash or property as it
would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant without regard to any limitations on exercise contained herein
(the “Alternate
Consideration”), and the Holder shall no longer have the right to receive
Warrant Shares upon exercise of this Warrant.  The Company shall not
effect any such Fundamental Transaction unless prior to or simultaneously with
the consummation thereof, any successor to the Company, surviving entity or the
corporation purchasing or otherwise acquiring such assets or other appropriate
corporation or Person shall assume the obligation to deliver to the Holder, such
Alternate Consideration as, in accordance with the foregoing provisions, the
Holder may be entitled to receive, and the other obligations under this
Warrant.  The provisions of this paragraph (c) shall similarly apply
to subsequent transactions analogous of a Fundamental Transaction
type.  Notwithstanding the foregoing, in the event of a Fundamental
Transaction in which the consideration consists of substantially all cash or
securities of a private company, at the request of the Holder delivered before
the 20th day after such Fundamental Transaction, the Company (or the successor
entity) shall purchase this Warrant from the Holder by paying to the Holder,
within five Business Days after such request (or, if later, on the effective
date of the Fundamental Transaction), cash in an amount equal to the Black


       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Scholes
Value (as defined below) of the remaining unexercised portion of this Warrant on
the date of such Fundamental Transaction.  For purposes hereof, “Black
Scholes Value” means the value of this Warrant based on the Black and Scholes
Option Pricing Model obtained from the “OV” function on
Bloomberg  Financial Markets (“Bloomberg”) determined as of the day
immediately following the public announcement of the applicable Fundamental
Transaction and reflecting (i) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the remaining term of this Warrant as
of such date of request and (ii) an expected volatility equal to the greater of
50% and the 100 day volatility obtained from the HVT function on
Bloomberg.

      


                  (d)           Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to paragraph (a) and (e) of this Section 9, the number of Warrant Shares that
may be purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the increased or decreased number of Warrant Shares shall
be the same as the aggregate Exercise Price in effect immediately prior to such
adjustment.

       

      (e)              Subsequent Equity
Sales.

       

      (i)    Except as
provided in subsection (e)(iii) hereof, if and whenever the Company shall issue
or sell, or is, in accordance with any of subsections (e)(ii)(l) through
(e)(ii)(7) hereof, deemed to have issued or sold, any shares of Common Stock for
no consideration or for a consideration per share less than the Exercise Price
in effect immediately prior to the time of such issue or sale, then and in each
such case (a “Trigger
Issuance”) the then-existing Exercise Price shall be reduced as of the
close of business on the effective date of the Trigger Issuance, to a price
determined as follows:

      


      Adjusted
Exercise Price = (A x
B) + D

                  A+C

      


      where

      


      “A” equals the number of shares of
Common Stock outstanding, including Additional Shares of Common Stock (as
defined below) deemed to be issued hereunder, immediately preceding such Trigger
Issuance;

      


      “B” equals the Exercise Price in effect
immediately preceding such Trigger Issuance;

      


      “C” equals the number of Additional
Shares of Common Stock issued or deemed issued hereunder as a result of the
Trigger Issuance; and

      


      “D” equals the aggregate consideration,
if any, received or deemed to be received by the Company upon such Trigger
Issuance;

      


      provided, however, that in no
event shall the Exercise Price after giving effect to such Trigger Issuance be
greater than the Exercise Price immediately prior to such Trigger
Issuance.

       

      For
purposes of this subsection (e), “Additional Shares of Common Stock” shall mean
all shares of Common Stock issued by the Company or deemed to be issued pursuant
to this subsection (e), other than Excluded Issuances (as defined in subsection
(e)(iii) hereof).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

                             
(ii)    For purposes of this subsection 9(e), the following
subsections (e)(ii)(l) to (e)(ii)(7) shall also be applicable:

       

                                                (1)   
Issuance of Rights or
Options. In case at any time the Company shall in any manner grant
(directly and not by assumption in a merger or otherwise) any warrants or other
rights to subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock or security convertible into or exchangeable for
Common Stock (such warrants, rights or options being called “Options” and such convertible
or exchangeable stock or securities being called “Convertible Securities”),
whether or not such Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the price per share for
which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(i) the sum (which sum shall constitute the applicable consideration) of
(x) the total amount, if any, received or receivable by the Company as
consideration for the granting of such Options, plus (y) the aggregate
amount of additional consideration payable to the Company upon the exercise of
all such Options, plus (z), in the case of such Options that relate to
Convertible Securities, the aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the total maximum number of shares
of Common Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such Options) shall be less than the Exercise Price in effect
immediately prior to the time of the granting of such Options, then the total
number of shares of Common Stock issuable upon the exercise of such Options or
upon conversion or exchange of the total amount of such Convertible Securities
issuable upon the exercise of such Options shall be deemed to have been issued
for such price per share as of the date of granting of such Options or the
issuance of such Convertible Securities and thereafter shall be deemed to be
outstanding for purposes of adjusting the Exercise Price. Except as otherwise
provided in subsection 9(e)(ii)(3), no adjustment of the Exercise Price
shall be made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such Options or upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities.

       

                                                (2)   
Issuance of
Convertible Securities. In case the Company shall in any manner issue
(directly and not by assumption in a merger or otherwise) or sell any
Convertible Securities, whether or not the rights to exchange or convert any
such Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon such conversion or exchange (determined
by dividing (i) the sum (which sum shall constitute the applicable
consideration) of (x) the total amount received or receivable by the
Company as consideration for the issue or sale of such Convertible Securities,
plus (y) the aggregate amount of additional consideration, if any, payable
to the Company upon the conversion or exchange thereof, by (ii) the total
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of all
such Convertible Securities shall be deemed to have been issued for such price
per share as of the date of the issue or sale of such Convertible Securities and
thereafter shall be deemed to be outstanding for purposes of adjusting the
Exercise Price, provided that (a) except as otherwise provided in
subsection 9(e)(ii)(3), no adjustment of the Exercise Price shall be made
upon the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities and (b) no further adjustment of the Exercise Price
shall be made by reason of the issue or sale of Convertible Securities upon
exercise of any Options to purchase any such Convertible Securities for which
adjustments of the Exercise Price have been made pursuant to the other


       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      provisions
of subsection 9(e). No adjustment pursuant to
this Section 9 shall be made if such adjustment would result in an increase of
the Exercise Price then in effect.

       

       

                                                (3)   
Change in Option Price
or Conversion Rate. Upon the happening of any of the following events,
namely, if the purchase price provided for in any Option referred to in
subsection 9(e)(ii)(l) hereof, the additional consideration, if any,
payable upon the conversion or exchange of any Convertible Securities referred
to in subsections 9(e)(ii)(l) or 9(e)(ii)(2), or the rate at which Convertible
Securities referred to in subsections 9(e)(ii)(l) or 9(e)(ii)(2) are convertible
into or exchangeable for Common Stock shall change at any time (including, but
not limited to, changes under or by reason of provisions designed to protect
against dilution), the Exercise Price in effect at the time of such event shall
forthwith be readjusted to the Exercise Price that would have been in effect at
such time had such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold.

       

                                                (4)           Stock
Dividends.  Subject to the provisions of this Section 9(e), in
case the Company shall declare a dividend or make any other distribution upon
any stock of the Company (other than the Common Stock) payable in Common Stock,
Options or Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without
consideration.

       

      (5)    Consideration for
Stock.  In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for cash, the consideration
received therefor shall be deemed to be the gross amount received by the Company
therefor. In case any shares of Common Stock, Options or Convertible Securities
shall be issued or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Company shall be deemed to be the
fair value of such consideration as determined in good faith by the Board of
Directors of the Company. In case any Options shall be issued in connection with
the issue and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued
for such consideration as determined in good faith by the Board of Directors of
the Company. If Common Stock, Options or Convertible Securities shall be issued
or sold by the Company and, in connection therewith, other Options or
Convertible Securities (the “Additional Rights”) are
issued, then the consideration received or deemed to be received by the Company
shall be reduced by the fair market value of the Additional Rights (as
determined using the Black-Scholes option pricing model or another method
mutually agreed to by the Company and the Holder). The Board of Directors of the
Company shall respond promptly, in writing, to an inquiry by the Holder as to
the fair market value of the Additional Rights. In the event that the Board of
Directors of the Company and the Holder are unable to agree upon the fair market
value of the Additional Rights, the Company and the Holder shall jointly select
an appraiser who is experienced in such matters. The decision of such appraiser
shall be final and conclusive, and the cost of such appraiser shall be borne
evenly by the Company and the Holder.

       

      (6)           Record
Date.  In case the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them (i) to receive a dividend
or other distribution payable in Common Stock, Options or Convertible Securities
or (ii) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

       

                             
(iii)    Notwithstanding the foregoing, no adjustment will be
made under this paragraph (e) in respect of: (i) the issuance of
securities upon the exercise or conversion of any Common Stock or Common Stock
Equivalents issued by the Company on or prior to the date hereof, (ii) the
grant of options, warrants, Common Stock or other Common Stock Equivalents (but
not including any amendments to such instruments) under any duly authorized
Company stock option, restricted stock plan or stock purchase plan whether now
existing or hereafter approved by the Company and its stockholders in the
future, and the issuance of Common Stock in respect thereof, (iii) the
issuance of securities in connection with a Strategic Transaction, or
(iv) the issuance of securities in a transaction described in
Section 9(a) or 9(b) (collectively, “Excluded Issuances”). For
purposes of this paragraph, a “Strategic Transaction” means
a transaction or relationship in which (1) the Company issues shares of
Common Stock to a Person that the Board of Directors of the Company determined
in good faith is, itself or through its Subsidiaries, an operating company in a
business synergistic with the business of the Company (or a shareholder thereof)
and (2) the Company expects to receive benefits in addition to the
investment of funds, but shall not include (x) a transaction in which the
Company is issuing securities primarily for the purpose of raising capital or to
a Person whose primary business is investing in securities or (y) issuances
to lenders.

       

                            (iv)           NASDAQ
Limitation.  Upon any adjustment to the Exercise Price pursuant
to Section 9(e)(i) above, the number of Warrant Shares purchasable hereunder
shall be adjusted by multiplying such number by a fraction, the numerator of
which shall be the Exercise Price in effect immediately prior to such adjustment
and the denominator of which shall be the Exercise Price in effect immediately
thereafter. This provision shall not restrict the number of shares of Common
Stock that a Holder may receive or beneficially own in order to determine the
amount of securities or other consideration that such Holder may receive in the
event of a transaction contemplated by Section 9 of this
Warrant.  Notwithstanding any other provisions in this Section 9 to
the contrary, if a reduction in the Exercise Price pursuant to Section 9(e)(i)
would require the Company to obtain stockholder approval of the transactions
contemplated by the Purchase Agreement pursuant to NASDAQ Marketplace Rule
4350(i) and such stockholder approval has not been obtained, the Exercise Price
shall be reduced to the maximum extent that would not require stockholder
approval under such Rule.

      


      (f)           Calculations. All
calculations under this Section 9 shall be made to the nearest cent or the
nearest 1/100th of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.

       

      (g)           Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will, at the written request of the
Holder, promptly compute such adjustment, in good faith, in accordance with the
terms of this Warrant and prepare a certificate setting forth such adjustment,
including a statement of the adjusted Exercise Price and adjusted number or type
of Warrant Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in reasonable detail the facts upon which such adjustment is based. Upon
written request, the Company will promptly deliver a copy of each such
certificate to the Holder and to the Company’s transfer agent.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (h)           Notice of Corporate
Events. If, while this Warrant is outstanding, the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including, without limitation, any granting of
rights or warrants to subscribe for or purchase any capital stock of the Company
or any Subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then, except if such notice and the contents thereof
shall be deemed to constitute material non-public information, the Company shall
deliver to the Holder a notice describing the material terms and conditions of
such transaction at least ten (10) business days prior to the applicable record
or effective date on which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction; provided, however, that the
failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such
notice.

       

      10.           Payment of Exercise
Price. The Holder shall pay the Exercise Price in immediately available
funds; provided,
however, that if, on any Exercise Date there is not an effective
Registration Statement (as defined in that certain Registration Rights
Agreement, of even date herewith, by and among the Company and the several
purchasers signatory thereto) registering, or no current prospectus available
for, the resale of the Warrant Shares by the Holder, then the Holder may, in its
sole discretion, satisfy its obligation to pay the Exercise Price through a
“cashless exercise”, in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:

       

      X = Y
[(A-B)/A]

       

      where:

       

      X = the
number of Warrant Shares to be issued to the Holder.

       

      Y = the
total number of Warrant Shares with respect to which this Warrant is being
exercised.

       

      A = the
average of the Closing Sale Prices of a share of Common Stock (as reported by
Bloomberg Financial Markets) for the five (5) Trading Days ending on the date
immediately preceding the Exercise Date.

       

      B = the
Exercise Price then in effect for the applicable Warrant Shares at the time of
such exercise.

       

      For
purposes of this Warrant, “Closing Sale Price” means,
for any security as of any date, the last trade price for such security on the
principal securities exchange or trading market for such security, as reported
by Bloomberg Financial Markets, or, if such exchange or trading market begins to
operate on an extended hours basis and does not designate the last trade price,
then the last trade price of such security prior to 4:00 P.M., New York City
time, as reported by Bloomberg Financial Markets, or if the foregoing do not
apply, the last trade price of such security in the over-the-counter market on
the electronic bulletin board for such security as reported by Bloomberg
Financial Markets, or, if no last trade price is reported for such security by
Bloomberg Financial Markets, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the "pink
sheets" by Pink Sheets LLC.  If the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Sale Price of such security on such date shall be the fair market
value as 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      mutually
determined by the Company and the Holder.  If the Company and the
Holder are unable to agree upon the fair market value of such security, then the
Board of Directors of the Company shall use its good faith judgment to determine
the fair market value.  The Board of Directors’ determination shall be
binding upon all parties absent demonstrable error.  All such
determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

      


      For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the original
Holder, and the holding period for the Warrant Shares shall be deemed to have
commenced as to such original Holder, on the date this Warrant was originally
issued pursuant to the Purchase Agreement (provided that the Commission
continues to take the position that such treatment is proper at the time of such
exercise).

       

      11.           Limitations on
Exercise. Notwithstanding anything to the contrary contained herein, the
number of Warrant Shares that may be acquired by the Holder upon any exercise of
this Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to ensure that, following such exercise (or other issuance), the total
number of shares of Common Stock then beneficially owned by the Holder and its
Affiliates and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act, does not exceed 4.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. Each delivery of an
Exercise Notice by the Holder will constitute a representation by the Holder
that it has evaluated the limitation set forth in this Section 11 and determined
that issuance of the full number of Warrant Shares requested in such Exercise
Notice is permitted under this Section 11.  The Company’s obligation
to issue shares of Common Stock in excess of the limitation referred to in this
Section 11 shall be suspended (and, except as provided below, shall not
terminate or expire notwithstanding any contrary provisions hereof) until such
time, if any, as such shares of Common Stock may be issued in compliance with
such limitation; provided, that, if, as of 5:30 P.M., New York City time, on the
Expiration Date, the Company has not received written notice that the shares of
Common Stock may be issued in compliance with such limitation, the Company’s
obligation to issue such shares shall terminate.  This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant.  By written
notice to the Company, which will not be effective until the 61st day
after such notice is delivered to the Company, the Holder may waive the
provisions of this Section 11 to change the beneficial ownership limitation to
9.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon exercise of this
Warrant, and the provisions of this Section 11 shall continue to apply. Upon
such a change by a Holder of the beneficial ownership limitation from such 4.99%
limitation to such 9.99% limitation, the beneficial ownership limitation may not
be further waived by such Holder.   

      


      12.           No Fractional Shares.
No fractional Warrant Shares will be issued in connection with any exercise of
this Warrant.  In lieu of any fractional shares that would otherwise
be issuable, the number of Warrant Shares to be issued shall be rounded down to
the next whole number and the Company shall pay the Holder in cash the fair
market value (based on the Closing Sale Price) for any such fractional
shares.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      13.           Notices. Any and all
notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement prior to 5:30 P.M., New York City time, on a Trading Day,
(ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement on a day that is not a Trading Day or later than 5:30
P.M., New York City time, on any Trading Day, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service
specifying next business day delivery, or (iv) upon actual receipt by the party
to whom such notice is required to be given, if by hand delivery. The address
and facsimile number of a party for such notices or communications shall be as
set forth in the Purchase Agreement unless changed by such party by two (2)
Trading Days’ prior notice to the other party in accordance with this Section
13.

       

      14.           Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.

       

      15.           Miscellaneous.

       

      (a) No Rights as a
Stockholder.    The Holder, solely in such Person's
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person's capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, amalgamation,
conveyance or otherwise), receive notice of meetings, receive dividends or
subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant Shares which such Person is then entitled to receive upon the due
exercise of this Warrant. In addition, nothing contained in this Warrant shall
be construed as imposing any liabilities on the Holder to purchase any
securities, whether such liabilities are asserted by the Company or by creditors
of the Company.

       

      (b) Successors and
Assigns.  Subject to the restrictions on transfer set forth in
this Warrant and in Section 4.1 of the Purchase Agreement, and compliance with
applicable securities laws, this Warrant may be assigned by the Holder. This
Warrant may not be assigned by the Company without the written consent of the
Holder except to a successor in the event of a Fundamental Transaction. This
Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. Subject to the preceding sentence,
nothing in this Warrant shall be construed to give to any Person other than the
Company and the Holder any legal or equitable right, remedy or cause of action
under this Warrant. This Warrant may be amended only in writing signed by the
Company and the Holder, or their successors and assigns.

       

      (c) Amendment and
Waiver.  Except as otherwise provided herein, the provisions of
the Warrants may be amended and the Company may take any action herein
prohibited, or omit 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      to
perform any act herein required to be performed by it, only if the Company has
obtained the written consent of the Holders of Warrants representing a majority
of the Warrant Shares obtainable upon exercise of the Warrants then
outstanding.

       

      (d) Acceptance.  Receipt
of this Warrant by the Holder shall constitute acceptance of and agreement to
all of the terms and conditions contained herein.

       

      (e) Governing Law;
Jurisdiction.    ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH
PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO
PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THE
PURCHASE AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND
SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL
BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED
BY LAW. EACH PARTY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY
JURY. 

       

      (d)           Headings.   The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

       

      (e)           Severability.    In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby, and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

       

       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,

      SIGNATURE
PAGE FOLLOWS]

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.

       

      
        	 
      	 
      	 
      
	
                CYTORI
      THERAPEUTICS, INC.

              
	 
      	 
      
	
                 

                By:

              	 
      	
                _______________________________

              
	
                Name:

              	 
      	 
      
	
                Title:

              	 
      	 
      


      

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      SCHEDULE
1

      


      CYTORI
THERAPEUTICS, INC.

      


      FORM OF
EXERCISE NOTICE

      


      (To be
executed by the Holder to purchase shares of Common Stock under the foregoing
Warrant)

       

      Ladies
and Gentlemen:

      


      (1)           The
undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by
Cytori Therapeutics, Inc., a Delaware corporation (the
“Company”).  Capitalized terms used herein and not otherwise defined
herein have the respective meanings set forth in the Warrant.

      


      (2)           The
undersigned hereby exercises its right to purchase __________ Warrant Shares
pursuant to the Warrant.

        

      (3)           The
Holder intends that payment of the Exercise Price shall be made as (check
one):

      


        o          Cash
Exercise

      


        o         
“Cashless Exercise” under Section 10

      


      (4)           If
the Holder has elected a Cash Exercise, the Holder shall pay the sum of $_______
in immediately available funds to the Company in accordance with the terms of
the Warrant.

      


      (5)           Pursuant
to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares
determined in accordance with the terms of the Warrant.

       

      (6)           By
its delivery of this Exercise Notice, the undersigned represents and warrants to
the Company that in giving effect to the exercise evidenced hereby the Holder
will not beneficially own in excess of the number of shares of Common Stock (as
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934) permitted to be owned under Section 11 of the Warrant to which this notice
relates.

      


       

       

      Dated:_______________,
_____

       

      Name of
Holder:  ___________________________

       

      By:__________________________________

       

      Name:
_______________________________

       

      Title:  _______________________________

      (Signature
must conform in all respects to name of Holder as specified on the face of the
Warrant)


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      SCHEDULE
2

      


      CYTORI
THERAPEUTICS, INC.

      


      FORM OF
ASSIGNMENT

       

      [To be
completed and signed only upon transfer of Warrant]

       

      FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto                             
(the “Transferee”) the right represented by the within Warrant to purchase                 
shares of Common Stock of Cytori Therapeutics, Inc., a Delaware corporation (the
“Company”) to which the within Warrant relates and appoints                             
attorney to transfer said right on the books of the Company with full power of
substitution in the premises. In connection therewith, the undersigned
represents, warrants, covenants and agrees to and with the Company
that:

      


      
        	
                (a)

              	
                the
      offer and sale of the Warrant contemplated hereby is being made in
      compliance with Section 4(1) of the United States Securities Act of 1933,
      as amended (the “Securities Act”) or another valid exemption from the
      registration requirements of Section 5 of the Securities Act and in
      compliance with all applicable securities laws of the states of the United
      States;

              


      

       

      
        	
                (b)

              	
                the
      undersigned has not offered to sell the Warrant by any form of general
      solicitation or general advertising, including, but not limited to, any
      advertisement, article, notice or other communication published in any
      newspaper, magazine or similar media or broadcast over television or
      radio, and any seminar or meeting whose attendees have been invited by any
      general solicitation or general
advertising;

              


      

       

      
        	
                (c)

              	
                the
      undersigned has read the Transferee’s investment letter included herewith,
      and to its actual knowledge, the statements made therein are true and
      correct; and

              


      

       

      
        	
                (d)

              	
                the
      undersigned understands that the Company may condition the transfer of the
      Warrant contemplated hereby upon the delivery to the Company by the
      undersigned or the Transferee, as the case may be, of a written opinion of
      counsel (which opinion shall be in form, substance and scope customary for
      opinions of counsel in comparable transactions) to the effect that such
      transfer may be made without registration under the Securities Act and
      under applicable securities laws of the states of the United
      States.

              


      

       

      
        	
                Dated:
        _________________________,
          __________________

              	 
      	 
      ___________________________________________
	 
      	 
      	
                (Signature
      must conform in all respects to name of holder as specified on the face of
      the Warrant)

              
	 
      	 
      	 
      ___________________________________________
	 
      	 
      	
                Address
      of Transferee

              
	
                In
      the presence of:

              	 
      	 
      
	 
      	 
      	 
      ___________________________________________
	 
      ___________________________________________	 
      	 
      ___________________________________________